HSBC could be the real winner from M&S Bank

M&S doesn't make the wine it sells in its stores so why build a bank? Why not stock its stores with HSBC's under an M&S label. It looks after the retailing and branding, HSBC brings capital and systems. Hey presto, a bank.

It's tempting to see M&S Bank, a partnership with HSBC, as an unnecessary distraction. Tesco is weighed down with woes over its stalling bank operation.

But M&S may have found both a better approach and provided a possible answer to a question long worrying HSBC management too.

M&S doesn't make the wine it sells in its stores so why build a bank? Why not stock its stores with HSBC's under an M&S label. It looks after the retailing and branding, HSBC brings capital and systems. Hey presto, a bank.

Bank brands are diminished but still cost millions in marketing to maintain. Yet with interest margins squeezed and costs rising, including the UK's bank levy, HSBC's top brass have long asked how they can make money while maintaining a large branch network.

Becoming a low-cost wholesaler of bank services to retailers is one answer. If there are 50 M&S in-store bank branches, that's 50 fewer HSBC branches needed on the high street. And M&S branches are open a lot longer than HSBC's.

Build a wall to China

Full-blown takeovers of large UK companies by Chinese interests are still rare. Acquiring minority stakes has been a common tactic over the past decade. Which makes the £1bn-plus offer for the London Metal Exchange by Hong Kong Exchanges and Clearing all the more remarkable.

It could see its bid backed by the LME board as early as next week, which will leave the world's most important metals exchange in the hands of the world's biggest metals consumer. This is an obviously risky position for the rest of the industrialised world. However, the LME chooses to dress it up, the bidder is a public company but firmly under government influence. It controls the board, enshrines its monopoly in law and can bar any one investor owning more than 5pc.

No one knows what China and Hong Kong will do with the LME once it's part of this state-sponsored system of control. But no country should be allowed to buy a piece of sensitive infrastructure such as the LME, whose chairman, Sir Brian Bender, a former career civil servant, is left with serious questions to answer.

The LME is a private company but is of great public interest – something it may not understand, or is hoping to avoid. Its ownership is open to justifiable scrutiny and should not fall to an entity protected by a state that refuses reciprocity when it comes to UK companies seeking equivalent deals within its borders. It's time to draw a line.

US can't help Europe

Poor job figures a week ago brought home to the US the threat posed by the eurozone crisis, prompting this column to predict: "American pressure on Merkel to compromise can only ratchet up after this week's economic news."

That's exactly what happened yesterday when President Barack Obama described the "urgent need to act" by European leaders. He talked of actions needing to be "decisive and concrete", forgetting recent evidence that those two words don't exist in the lexicon of European politics.

The looming bail-out of Spain will be another flawed compromise. Nothing being proposed by the eurozone gets close to the problem – debt-induced recession trapped inside the system, unable to escape through currency fracture or solved by policy reform. America can't help Europe because Europe can't help itself.